News
Maple Leaf Signs 1.5 Million RMB Organic Fertilizer Supply Agreement
(TSX-V: MPE)Last Close: November 18, 2009 - $0.11
Shares Issued: 61,586,627
Maple Leaf Reforestation Inc. ("Maple Leaf" or the "Company") is pleased to announce that it has signed an agreement with the town of Lingquan, Hunan in China to supply organic fertilizer to the town-operated starch processing project.
Under the agreement:
- The town of Lingquan, Hunan ("Lingquan") is to grow 10,000 mu (1,650 acres) of sweet potatoes starting in early spring 2010. The sweet potatoes will be used for processing starch.
- Maple Leaf will be responsible for providing 250 kgs of fertilizer per mu or 2,500 tons in total for the whole project.
- The fertilizer will be purchased by Lingquan for approximately $100 Cdn (600 Rmb) per ton, which is a discounted price. The total value of the agreement is approximately $234,000 Cdn (1.5 million Rmb). Maple Leaf has provided the fertilizer to Lingquan at a discounted purchase price because it believes that forming a relationship with Lingquan is priority number one. If Lingquan is satisfied with the quality of the fertilizer Maple Leaf hopes that the relationship will grow and a higher price will be obtained for any future fertilizer supply agreements that may be entered.
- Maple Leaf will receive approximately $4,700 Cdn (30,000 Rmb) as a deposit for this order.
- Maple Leaf will begin production of the organic fertilizer for Lingquan in December, 2009 with delivery of the entire order to occur in early spring 2010.
- In addition, Lingquan will be renting some space in Maple Leaf's production facilities for the purpose of processing the starch from its sweet potatoes. The rental arrangement will last for a duration of two months and Lingquan will pay Maple Leaf a total rental fee of approximately $3,120 Cdn (20,000 Rmb).
- The residue from the starch production of approximately 17,500 tons will be given to Maple Leaf at no charge. Maple Leaf is able to use the residue to produce additional organic fertilizer.
Raymond Lai, President and CEO of Maple Leaf comments, "We are very pleased to see the organic fertilizer operations expand. It is a big step for us towards developing a solid relationship with local government. To be able to enter a supply agreement with the local government immediately after winning the grant really shows the government's willingness to work with our Company".
Maple Leaf would also like to announce that the joint venture agreement signed with Hanshou County Jinmandi Agriculture Development & Plantation Center ("Jinmandi") in May 2009 (see news release dated May 14th, 2009) has been cancelled. Jinmandi has encountered difficulties in obtaining all the necessary permits and approvals from the local governments despite the assistance that Maple Leaf offered. Given these difficulties, Maple Leaf believes that its resources will be better utilized developing its alfalfa and organic fertilizer projects which offer near term revenue opportunities at favorable margins.
About Maple Leaf Reforestation Inc.
Maple Leaf is a Canadian company operating a large-scale forest nursery whose primary focus is growing value- added tree seedlings and alfalfa feedstock alongside landscaping and nursery products in China. In addition, the multi-faceted Xinjiang Yellowhorn tree project will provide for the manufacture of biodiesel fuel. Reforestation has been identified as a critical strategy to help manage China's troubling environmental issues, namely pollution and desertification. Maple Leaf currently has over 6 million varieties of seedlings under cultivation at its nursery facility that includes a 110,000-square foot greenhouse located in Liang Cheng, Inner Mongolia, China.
Maple Leaf is a wholly-owned foreign enterprise ("WOFE"), which allows Maple Leaf to control 100% of the direction and operations of the company in China while permitting the cash generated from operations in China to flow back to Canada.
For further information regarding Maple Leaf Reforestation Inc., visit www.mlreforestation.com or contact:
Maple Leaf Reforestation Inc.
Raymond Lai, Chairman, President & CEO
Tel: +1 (403) 668-7560 Fax: +1 (403) 250-2534
E-mail: rlai@mlreforestation.com
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
Certain statements in this news release including (i) statements that may contain words such as "anticipate", "could", "expect", "seek", "may" "intend", "will", "believe", "should", "project", "forecast", "plan" and similar expressions, including the negatives thereof, (ii) statements that are based on current expectations and estimates about the markets in which Maple Leaf operates and (iii) statements of belief, intentions and expectations about developments, results and events that will or may occur in the future, constitute "forward-looking statements" and are based on certain assumptions and analysis made by Maple Leaf. Forward-looking statements in this news release include, but are not limited to, statements with respect to future capital expenditures, including the amount, nature and timing thereof; other development trends within the China's seedling industry; business strategy; expansion and growth of Maple Leaf's business and operations and other such matters. Such forward-looking statements are subject to important risks and uncertainties, which are difficult to predict and that may affect Maple Leaf's operations, including, but are not limited to: the impact of general economic conditions; industry conditions; government and regulatory developments; seedling product supply and demand; competition; and Maple Leaf's ability to attract and retain qualified personnel. Maple Leaf's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do transpire or occur, what benefits Maple Leaf will derive there from. Subject to applicable law, Maple Leaf disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
All forward-looking statements contained in this document are expressly qualified by this cautionary statement. Further information about the factors affecting forward-looking statements is available in other disclosure documents of Maple Leaf which have been filed with Canadian provincial securities commissions and are available on www.sedar.com.